Operators See Tougher Market In 2009 Due To Economy, DUI Policies

On-premise sales of alcoholic beverages in U.S. bars and restaurants declined by 4.6%, to $49.5 billion in 2009, according to Mintel, a research firm. Reduced sales reflect slower traffic in classic street locations and offer a window on the continuing challenges that face amusement and music operators.

Mintel cited the soft economy and decreasing patronage at restaurants as major reasons for lower on-premise consumption. According to the National Restaurant Association's ongoing performance tracking, restaurant traffic was down considerably in 2009. Restaurants said they saw some improvement in early 2010, but again reported declines in same-store sales and traffic in both April and May of this year.

"Obviously, if consumers are not eating out as much, on-premise alcohol consumption is going to reflect that," said Mintel director of research Joan Holleran. But steadily increasing DUI enforcement nationwide is another likely factor in declining bar and restaurant alcohol sales. Mintel said consumers have "become more cautious" about drinking out of home.

In related news, the American Beverage Institute charged that Mothers Against Drunk Driving, the best-known consumer advocate for tough DUI policies, has evolved from a "responsible drinking and driving" group to a "prohibitionist" organization.

"The public needs to realize that MADD isn't the same group it was 20 years ago," said ABI managing director Sarah Longwell.

MADD and ABI remain at odds over legislation before Congress that would require installation of "interlock" technology in autos of convicted drunk drivers. The technology would require drivers to pass a built-in breathalyzer test (for blood alcohol content) before the car's ignition would work. Rep. Vernon Ehlers (R-MI) and Sen. Frank Lautenberg (D-NJ) have offered bills for this purpose.

Not surprisingly, Mintel's report showed that at-home alcohol consumption outpaces on-premise consumption, although both are falling. The number of drinks consumed at home in an average month is 10, compared with 5.7 consumed at bars and restaurants.

But Mintel's research suggests that lower overall consumption and "trading down" to less expensive brands has occurred both in public locations and at home. About half of those who drink at home report they are drinking less than they did a year ago, and 28% report having traded down.